Specific Factors That Are Used in Selecting Tax Returns for Audit

question 17

Essay

Specific factors that are used in selecting tax returns for audit and the weights for such factors are not released to the public. Summarize the public information about tax audit selection; how might a tax return's chances of audit increase above national norms?

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Definitions:

Compound Interest

Interest computed not only on the original amount invested or loaned but also on the interest that has been added to this principal over past periods.

Simple Interest

Interest computed solely on the initial sum, without accumulation through compounding.

Income Earned

Revenue generated from a person's job, investments, or business operations, excluding capital gains or gifts.

Annual Salary

The total amount of money earned by an employee in one year before taxes and deductions.